1. Dr. Oktri Mohammad Firdaus Dr. Singgih Saptadi
Crossdocking
Dr. Oktri Mohammad Firdaus
Dr. Singgih Saptadi

2. Crossdocking A supply chain strategy Inbound materials are
Directed to outbound doors and are directly loaded into outbound trucks
...or...
“Staged” for a very brief time period before loading
Inbound product flow is synchronized with outbound product flow to essentially eliminate storage of inventory

3. Crossdocking
Can accomplish significant reductions in total costs and in lead times in a supply chain
“Crossdock facilities (CF)” act as transfer points

4. Crossdocking B A Crossdock A Facility A B A B Receiving
Staging (<24hr)
Shipping B
Stores
Suppliers

5. Traditional Distribution
Warehouse B A B
Receiving
Putaway
Storage
Replenishment
Picking
Shipping B
Stores
Suppliers

6. Traditional Distribution

7. Direct Shipment A B A A A Warehouse B A B Receiving Putaway Storage B
Replenishment
Picking
Shipping B
Stores
Suppliers

8. Crossdocking 550,000 warehouses in the U.S. alone (1995 estimate)
Crossdocking can turn warehouses into transfer nodes, rather than storage nodes

9. Applicability of Crossdocking Has Increased
Fierce competition in all industries, especially retail
Cooperating with supply chain partners to reduce the system-wide costs
Internet allows companies to communicate among each other
In real time
At costs significantly lower than the past

10. Wal-mart The world’s largest retailer
>5,000 stores throughout the world
Popularized crossdocking

11. This Study Types of crossdocking When crossdocking is applicable
Prerequisites
Industries where crossdocking is applied
Advantages and drawbacks
Implementation issues
Case Study: Ekol Logistics

12. Types of Crossdocking Pre-allocated supplier consolidation
Pre-allocated crossdocking operator (CDO) consolidation
Post-allocated CDO consolidation
Pre-allocated: Destination is determined at the supplier
Post-allocated: Destination is determined at the crossdock facility

13. Supplier consolidation:
The supplier builds the final (possibly multi-SKU) pallets that will be shipped to the final destinations.
CDO consolidation:
The final pallets are built by the CDO at the crossdock facility

14. Crossdocking – Type 1 Crossdock Facility Supplier Stores 1
Preallocated 1 2 2
Supplier
Consolidation 3 3

15. Crossdocking – Type 2 Crossdock Facility Supplier Stores 1
Preallocated 1 1 2 3 2 2 3 3
CDO
Consolidation

16. Crossdocking – Type 3 Crossdock Facility Supplier Stores Postallocated1 1 2 2 3 3
CDO
Consolidation

17. When is Crossdocking Applicable?
Products with predictable, high demand and high cubic volume flow
Perishable products
Ex: Supermarket chain ASDA partnered with Kimberly-Clark, the paper industry giant which supplies high-cube, low-value products such as toilet tissue and paper towels.
Products very appropriate for a pilot crossdocking study

18. When is Crossdocking Applicable?
Promotional products
Sisko: “...Not recommended for crossdocking”
Witt: “Mass merchandisers implement crossdocking for promotional products.”
A scientific approach, possibly through building mathematical models, should be followed for identifying which of the two conflicting statements hold under which conditions.

19. Prerequisites of Crossdocking
Total commitment and continuous monitoring at all times by all the parties involved
Effective communication between parties
Perfect coordination of material flows.
Many interrelated decisions have to be made under numerous resource and time constraints. Mathematical models can be of great use.
Perfect quality requirements

20. Prerequisites of Crossdocking
Sharing the costs and benefits of crossdocking:
CDO benefits from decreased inventories, labor, and storage space requirements.
Suppliers involved may have to make significant investment into technology
Retailers may end up with higher inventory levels due to increased lead times.
The CDO would prefer that the outbound trucks can wait for long time periods such that flexibility is achieved in scheduling
The trucking company would not accept to absorb the cost related with the waiting time of its trucks.

21. Benefits of Crossdocking
Allows the efficient consolidation of products.
Decreases inventory levels due to elimination of storage.
Enables faster product flow (by eliminating “dwell”).
Enables more frequent deliveries.
Decreases inventory obsolescense due to reduced inventory and faster product flow.

22. Benefits of Crossdocking
Decreases labor requirements and costs due to decreased material handling (through elimination of putaway to storage and order picking). The typical yearly cost per warehouse worker can be estimated around $40,000 in the U.S.
Decreases inventory damage costs due to less material handling.
Decreases the amount of space required, and thus increases the handling capacity of the facility.

23. Benefits of Crossdocking
Supports customers’ Just-in-Time strategy.
Accelerates payments to suppliers (which is an important argument that can be used to convince suppliers to participate in crossdocking).
Improves the relations with the supply chain partners.
Enables faster completion of incomplete orders due to more frequent deliveries.

24. Benefits of Crossdocking
Positive Feedback
Loop for Wal-mart
Applicability
of crossdocking -
Costs + +
Prices offered to
customers
Stockout and
inventory costs
(+) Positive feedback loop -
Predictability of Sales
Number and scope
of promotions + -

25. Drawbacks of Crossdocking
Risk of stockout:
Any unavailability of the product at the suppliers
Any delays in the supply chain
Any failure to coordinate perfectly
Union fears of losing jobs
The main savings in crossdocking come from decreased inventory and labor costs.

26. Type 2 Crossdocking Implementation
Facility
Supplier
Stores 1
Preallocated 1 1 2 3 2 2 3 3
CDO
Consolidation

27. Step 1 Order Step 4 ASN Step 9 Crossdock Facility Supplier Stores
Shipment Details
Crossdock
Facility
Supplier
Stores
Step 5
Arrival Date &Time
Pickup Time ...
Step 8 1 2 3
Preallocated
Step 2 1
Step 6
Step 7
Step 3 2 3

28. Crossdock
Facility
Supplier
Stores
Step 13 1
Step 12
CDO
Consolidation 2
Step 10 3
Step 11